Imagine a world in which landlords always fix problems quickly, tenants never damage property and always pay their rent in a timely fashion. In such a world, lease agreements would ________.
A)still exist to solve the commitment problem
B)be unnecessary
C)apply only to people with low monthly income
D)only serve the interests of tenants

Question

Quizplus · Accepted Answer

Even in this situation, landlords would still worry that tenants would move out the moment they discovered cheaper rent elsewhere, and tenants would worry that landlords would kick them out the moment the landlord found someone willing to pay more for the apartment.  Thus, in the absence of a long-term lease, the two parties might be reluctant to enter into a rental agreement

Imagine a World in Which Landlords Always Fix Problems Quickly